Business Breakdowns
· Matt Reustle
[00:00:00] S0: Yeah, it's very interesting to hear. I can think of our own internal use case where we implemented a software. It wasn't Monday.com, but just the unlock at the time where it was emails and messages to just have one single system that was pulling from Google Drives and our email and our Excel files and our RSS feeds and external and internal. It was just unbelievable in terms of the unlock that that created. But we did run into issues where the ability to connect into other systems started to break down and there's all types of issues. So you need to keep evolving it to meet our needs, let alone the needs of a McDonald's or a Bloomberg. And that's one of the points I did want to get to. It seems like Canva is by all means an incredibly successful business at this point in particular, but I'm sure when they started working with Monday.com they were probably smaller and still compared to a McDonald's or a Bloomberg. There's a big gap there. My impression was that it was very much small and medium sized businesses and the larger enterprise or larger organizations have started to come more recently. Can you talk about that evolution and how that played out? Whether it was just organic, natural evolution to go up market or if there were particular things that really drove that?
· Ben Hensman
[00:00:00] S1: Yeah, so I mentioned that Monday really differentiates through this LEGO Blocks approach to software, which allows organizations of any kind to build, run and automate the way their team or their organization works. This has always been really important for larger businesses. I think the move up market was always something that the founders were interested in doing and wanted to prosecute. But it did happen organically in that their early customers, many of whom were large customers, were Forbes 500 customers in the US or other business globally where they had low levels of penetration, were coming into a single team. Over time, the effectiveness of the product, the ease of use and flexibility of the product meant that it started moving from team to team. But if you go back even as recently as 2019, the business had very few large customers. In 2019, they finished with 76 customers that spent more than $50,000 a year. With Monday.com today, that's 3,200 customers still growing at 40% year on year. And they now have 1,200 customers spending more than $100,000 a year with them. So that's changed really significantly. And part of that is the different capabilities across automations and workflows. But part of it is also creating a really organized matrix of how customers can use the product, a really extensive template library, and starting to build out other parts of the commercial strategy as well that have really assisted customers in scaling and discovering different ways that they can use the product through partners and through application developers as well, who have been building around the platform to solve other problems adjacent to the core use cases of Monday. All of these things have worked together to enable enterprises to invest in the Monday use cases. And what's been really interesting is over time, as users have scaled on the platform, they've typically been internal champions that form people, individuals. They might be team leaders, they might be really passionate about how successful Monday has been for their team, but they really advocate strongly for bringing other teams and linking together collaboration within the platform to get to much better outcomes and so you see that in the numbers.
· Ben Hensman
If you look at cross-team interactions in the platform today, there's 33 million monthly cross-team interactions on a daily basis, 73% of customers are collaborating across departments. And that's really what's driven this incredible expansion into the enterprise. Of course, there's also been significant investment in enterprise-grade features, permissions, security. This is all really critical and perhaps a nice segue into really what makes Monday different. And we can dig into this a bit more, is Monday DB. Scaling these sorts of horizontal use cases on a very broad product can be technically difficult, purely based on database limitations. And Monday has built an incredible underlying architecture which it continues to advance. That in fact is the product. It's very different to traditional software where you're using a defined user experience that is calling a database layer in the background. And the really interesting thing about Monday is it is the database. They've built a proprietary schema-less database architecture that allows users to instantly customize the workspace, dragging, dropping, adapting workflows at any scale and doing so in a way that's defined with software rather than the rigid schema of a fixed database underneath. But that's required real investment and innovation from inside the business to allow the database to scale for the enterprise. And so a couple of years ago, in 2019 or 2020, when they were predominantly an SMB-focused business, Monday DB wasn't yet built and it wasn't yet ready for the kind of scale that we see now. And that investment, we've seen incredible feedback from customers, incredible change in speed and the ability to run many hundreds of thousands of items and columns on boards that's changed significantly and facilitated that move up into the enterprise.
· Matt Reustle
[00:00:00] S0: Can you dive into that a bit more? I'm thinking about the best example, but in the most layman's terms possible in terms of the database differentiation versus a traditional software package. And let's pick a Salesforce or whoever it might be as a CRM, which might look different—and tell me if that's the wrong example to use—but how does that differ from the way that Monday.com approaches it in the ability to scale?
· Ben Hensman
[00:00:00] S1: Typically, in the first era of software, you would build a schema that you were going to use inside the application and you would build it in a relational data model. And that was very, very difficult to update without a significant upgrade. By doing it in a schema-less way and building it in a flexible way where data is put together not just on a rows and columns basis, but using separate databases in a columnar way and in a row-based way so that you can conduct queries in any way for the customer. And that way you can conduct them whatever best suits the data model. But if you think about Salesforce, they've built an entire ecosystem around a core product that is used in a very specific way and it has a very specific data model. And so if companies want to engage and feed data into that model, they have to do it a certain way. Monday.com is the opposite of that. And so by having an open database, a very flexible database with a flexible schema, and so many integrations and points where data can come in and then flow back out to execute work, they provide a very different experience for the customers that just enables a totally different level of flexibility. Hopefully that makes sense.
· Matt Reustle
[00:00:00] S0: Yeah. Is using the LEGO example a good comparison? If you're bringing around a completed LEGO set and you have to bring that completed LEGO set around everywhere you go, that's obviously taking up a lot of capacity versus bringing the individual blocks, putting together whatever you might want, but it's going to be smaller in size. You still have the ability to customize it, make it look different. Is that a decent way where it's chunking out the individual pieces that can then be put back together in whichever way you want? Is that a fair way to represent it?